Photo Gallery: Red Bull's Total Marketing
An Empire with Wings Red Bull Pumps Energy into the Sporting World
A woman in a black pants-suit guards the frontier between a cold November evening and the cozy world of Red Bull. Guest list in hand, she greets visitors and controls who can enter Hangar 7, a steel-and-glass domed construction brightly lit on the inside. Some people she rejects with a brusque gesture, others she greets with a peck on the cheek and the words, "Welcome to our family get-together!" Only a lucky few are permitted to joint the festivities at Salzburg Airport -- though in this case "few" means more than a thousand people.
At the Abu Dhabi Grand Prix the previous day, 23-year-old Sebastian Vettel had become the youngest ever Formula One world champion. Now he's back, though not in his home town of Heppenheim in Hesse nor anywhere else in Germany. Instead he's in Austria, the home of Red Bull. The beverage manufacturer helped make Vettel a champion. The company financed Vettel's career from the tender age of 11. It even built his winning sports car, the Red Bull RB6. That's why Vettel's first stop is in Austria.
A jazz band plays amid artificial palm trees, polished old fighter aircraft and racing cars. When the world champion makes his entry, the audience parts like the Red Sea, leaving a path to a group of leather armchairs encircled by five cameras. Cradling his trophy in his arm, Sebastian Vettel slowly makes his way through the crowd. People cheer, he beams. His check shirt is hanging out of his jeans. Vettel sits down next to the presenter, next to Austrian motor racing legends including Niki Lauda and Gerhard Berger.
For an hour-and-a-half they chat live and exclusively for the 'Sport and Talk' show on Servus TV, Red Bull's television station. The audience is made up of company employees and athletes from other sports in which Red Bull has invested. Nearly every sentence Vettel utters is applauded, and occasionally the studio manager yanks a spectator up out of his seat when he wants everyone to give the young hero a standing ovation.
Total Marketing
At the end, Vettel modestly says, "I still have a lot to learn. I don't want to let victory go to my head." It's impossible not to like him.
Vettel's triumph is the triumph of the Red Bull strategy, which focuses on total marketing. This isn't restricted to putting the company logo all over the place. "It has always been our philosophy not to be on the outside buying a fender that we can put stickers on, but rather to be integrated into the relevant sport and to carry the responsibility for success and failure," says Red Bull founder Dietrich Mateschitz.
Red Bull spends half a billion dollars a year on sport. Only Nike, Adidas and Coca-Cola are more generous. And the company wants more than to merely bask in the glory that encircles successful people and teams. Red Bull wants to create success and be noticed.
No other sponsor has committed itself as broadly to sport worldwide over the last 20 years. Red Bull is involved in more than 100 sports and currently sponsors 456 athletes around the globe. They include snowboarders, motocross riders, beach volleyball players, hang gliders and entire ice hockey and soccer teams. Red Bull has invented sports such as air racing, in which aerobatic pilots fly around a course, as well as competitions for cliff divers, trick skiers and even soapbox buggy drivers. All must exude a daredevil attitude and youthful energy. The objective is to create spectacular images.
Before Red Bull became a globe-spanning brand, it was happy simply to open up and occupy niche markets. Today, some 4 billion cans of the drink are sold every year, generating turnover of €3.3 billion ($4.3 billion). That means the company can now run no fewer than two Formula One teams as well as soccer clubs from Salzburg and Leipzig to Sao Paolo and New York. Although it is spending more and more, the principle remains unchanged. All the clubs were renamed or re-founded when Red Bull came on board, and their management boards were replaced. The empire always wants to be in control.
Red Bull is based in Fuschl am See, a village of 1,500 people east of Salzburg. There's a bank, a pharmacy and a bakery. The local tourist office offers a romantic horse-and-cart ride, and on Fridays there's liqueur-tasting at the monastery shop. A public bus service halts at the Brunnerwirt stop once every hour.
Creating Demand
The Red Bull global headquarters lie at the entrance to the village. This looks as if a couple of UFOs have landed in the Austrian countryside. Over the years the small white office building that was the original headquarters has been increasingly encircled by round, angular and arched architectural compositions in glass. Of a total workforce of 6,900, 500 work in Fuschl am See. Yet there is nothing to suggest that Red Bull is based there; no signpost, no sign, no logo. Although if you peek through the office window you may recognize some distinctive blue-and-red fridges.
The woman at the entrance apologizes that there's nobody to speak to. That's exclusively Mr. Mateschitz's responsibility, and he only visits twice a month. "We take great care with our public relations," she says.
Dietrich Mateschitz discovered the sweet drink in Hong Kong in the early 1980s, and decided it was his path to global success. 66-year-old Mateschitz is a large man with a winning smile. He will only talk to a few reporters whom he knows very well, who are permitted to call him "Didi" and are, of course, fellow Austrians. Everyone else must make do with replies by e-mail. Mateschitz avoids the media spotlight. Firstly he doesn't like it. Secondly, at least officially, he doesn't want to deflect interest away from the brand -- his brand.
When Mateschitz brought his energy drink onto the market in 1987, there wasn't any demand for it. So he set about creating some. Before founding Red Bull, Mateschitz worked as a marketing manager at toothpaste manufacturer Blendax. So he certainly knew his way around the ad business. Classic advertising for an unusual product seemed contradictory. Rather than copying other campaigns, he took a much cleverer tack. Just as the first cans were hitting the shelves in Austria, TV broadcaster ORF screened a portrait of Ferrari's young Formula One pilot Gerhard Berger, a friend of Mateschitz. Berger was shown jogging on the beach in Brazil, and drinking Red Bull. The next day, sales of the beverage skyrocketed.
To this day, Mateschitz runs his company with a lot of gut feeling and a passion for vision. He's no longer satisfied with being able to sell his drink. In addition to Servus TV, Red Bull has spawned many other media products, mainly print magazines about soccer, motor racing, celebrity gossip, and lifestyle. The company even runs its own mobile telephony service in Austria, Hungary and Switzerland. Whenever an idea grabs Mateschitz, he almost stubbornly holds onto it.
'Generation Red Bull'
Mateschitz never considered himself a sponsor. Sponsors just hand out money, have little say, and after the money is spent it's gone. When he bought Ford's Formula One team six years ago, it was a shambles. But he turned it around -- then did the same for a second motor-racing team that was once called Minardi and is now known as Toro Rosso; Italian for "red bull."
Formula One racing is in the throes of opening up new Arab and Far-Eastern markets, growth markets for motor racing and, of course, Red Bull. Even so, the US remains one of the most important markets for energy drinks. Because Formula One never caught on there, Mateschitz chose to invest in soccer. For decades soccer tried desperately to hold its own against more traditional American sports. As such, those who tried to promote soccer did more-or-less everything wrong. They put on the soccer games on football fields with lots of ten-yard lines, and then were surprised at the lack of atmosphere when 10,000 spectators were spread across stadiums with a capacity for 80,000.
In early 2006 Red Bull entered the stage, taking over the New York MetroStars, a caricature of a soccer club trying to hold its own in a city that was already home to the Yankees (baseball), Rangers (hockey), Giants und Jets (football) and Knicks (basketball). Nobody seemed to need soccer. It was as superfluous as an energy drink.
A New Concept for Soccer
But Red Bull had developed a new concept, the idea of fast-paced soccer that would remain even as coaches and players moved on. Younger players were brought in, followed by the usual gradual development that nobody in metro New York had previously thought necessary. The team no longer played in the Giants stadium, but at the Red Bull Arena in New Jersey on the far side of the Hudson River. The stadium cost $200 million, and was purpose-built for soccer and 25,000 supporters. These pay an average of $25 per ticket. That makes watching soccer cheaper than other professional sports. As a result, the stadium is packed week after week, and spectators are treated to real turf, penalty areas, goals by Thierry Henry, and no annoying ten-yard lines.
It's not all thanks to Red Bull. Soccer's prospects have improved in the US: immigrants love the game, the World Cup in South Africa was a televisual triumph, and the Urban Soccer League is the favorite hobby of thousands of metropolitan New Yorkers. It is possible that Red Bull arrived just at the right moment.
Red Bull's access to professional soccer is slightly trickier in many other countries. In Germany, for instance, it has to abide by the rule that a club's name cannot include that of a company. Red Bull therefore located a fifth-division side near Leipzig that was willing to sell its playing rights. Thus acquired, the license went to the newly-founded club Rasenballsport Leipzig -- abbreviated to "RB" -- which, thanks to a large cash injection from the company with the same initials, is on an almost unstoppable march toward the Bundesliga, Germany's premier league (SPIEGEL 42/2010).
Clubs lose influence when corporations like Red Bull cease being mere sponsors and start pocketing athletes, teams and even clubs, insist on appointing the club president and coach, build stadiums, and invent entire leagues or competitions. Indeed companies like Red Bull change sport itself. They make it younger and more modern. But do they make it better? They are, after all, primarily interested in their brands, and ideals are useful only inasmuch as they promote the desired image.
Snowboarding Transformed
Doping is the biggest problem facing professional sport, yet so far Red Bull hasn't joined the fight to end the practice. Why should it? Its own product may not be on any list of banned substances, but it purports to "give you wings," give you a boost. That's what it's all about.
A new sort of athlete is emerging. You could call it "Generation Red Bull." In an ideal world you would end up with someone like Sebastian Vettel; a friendly version of this species of passionate, ruthless, rather narcissistic sportsmen and -women. Red Bull athletes are egotistical and daring. They are generally good-looking and rarely stick to any rules but their own, flexible ones. Shaun White, the Californian snowboarder, is one of this new breed.
White was good even before Red Bull came along. But since then, first Shaun White and then the entire snowboarding scene have undergone a transformation.
In the past, even professional snowboarders shared the half-pipes, the tubes of ice in which they trained. They watched each other practice, encouraged one another, partied at night, and always hung out together. Snowboarders recall that the sport used to be a contest among friends. But now the very top snowboarders don't want to be reminded of this era.
In addition to his prize money, freckle-faced 24-year-old Shaun White earns $10 million a year from advertising. White doesn't want to share the half-pipes any longer, doesn't want others seeing what he's practicing. And quite a few people in the snowboarding fraternity say Red Bull talked him into this. They say he now thinks he's something special, the "Red-White Bull"; a pale, red-haired superstar.
Red Bull spent half a million dollars building White a half-pipe in the Rocky Mountains, and he's now flown up his hill by helicopter. His campaign is known as Project X. Shaun White no longer eats or travels with his former friends. He employs bodyguards, has a manager and his very own chef.
White's world is a cool one. Once, shortly before the Winter Games in Vancouver, White was interviewed sitting on a sofa in a log cabin in Aspen, Colorado. There were no officials around nor indeed anyone over the age of 35. Instead there were hundreds of cans of Red Bull, loud music, sun glasses from co-sponsor Oakley and lots of girls in short skirts. More than 200,000 people had just been killed by an earthquake in Haiti. "Oh, yeah. I heard something happened in Haiti," White said.
Is it unfair to hold such things against him or to blame a company like Red Bull for producing the kind of athletes it needs: winners?
At nearly every Formula One race, Red Bull erects an Energy Station in its paddock. This broad, shiny, three-story glass-fronted metal building overshadows all the other teams' temporary headquarters. Everyone is welcome inside, where there's freshly-prepared finger food accompanied by endless music, while an array of TV monitors show videos of motorcycle stunt riders and base jumpers. The atmosphere is always pleasant.
Stony-faced Helmut Marko has a PhD in law. The 67-year-old from Graz in Austria drove a couple of Grand Prix races himself in the 1970s, before a small stone flicked up by another car smashed through his helmet visor and damaged his eye so badly that he had to give up racing. Today Marko is one of the three directors of Red Bull Racing and the link back to company headquarters. The team has 550 employees in England, but it's just one service provider within the Red Bull empire. "Austria decides everything," Marko says.
Searching for the Next Vettel
Marko also gets to decide which up-and-coming drivers Red Bull will promote. He can launch careers, but he can also end them by striking the funding for would-be talents. That recently befell a young New Zealander who was too sensitive to throw his weight around on the racetrack. "You have to be ruthless in separating the wheat from the chaff," Marko admits. "Racing drivers have to be brutally tough. They're all fast, but the difference is whether they are good under pressure."
Talented drivers get the cost of a racing car paid for by Red Bull, and the company's own special motor racing center has fitness equipment as well as doctors and physical therapists on hand to monitor and improve drivers' fitness, and there are consultants to advise on nutrition and even mental issues. The aim is to teach young drivers how to work on themselves and perfect their skills. But they are also forced into taking the initiative themselves. They don't get travel or living expenses. These are the drivers' own responsibility.
Red Bull is now searching for the next Vettel. After all, nobody knows how long the world champion will stay with the company and its team -- his contract runs out in one or two years. The strength of the Red Bull empire expresses itself through its ability to create more and more new champions who then act in keeping with the company's image.
After his stay in Salzburg and a brief detour to team headquarters in England, Sebastian Vettel flew back to Abu Dhabi to test tires. There was no time to sit on his laurels.
It's now Thursday, four days after Vettel became world champion. He's been traveling ever since, clocking up 11,000 air miles so far.
In Abu Dhabi he has an appointment with a sponsor in a mall. The two security men at the door have been slipped a photo of Vettel so they know whom to let in. They wouldn't otherwise be able to recognize the pale, unshaven young man with the slightly open mouth who is now coming out of the elevator looking to all intents and purposes as if he were searching for the way out.
The mall only just opened. It's empty and smells of cleaning products. A group of people stands in front of one of the stores: photographers, PR people and a racing-obsessed dentist and his wife, wearing a Ferrari cap and shirt. This is an exclusive event for the press and 16 winners of a competition. Vettel plays a game of foosball with the competition winners, has his picture taken, and appears as if he could do with a large bottle of energy drink to keep his eyes from closing with exhaustion.
Vettel takes the microphone in his hand and says he is "very proud" and "very tired." The season has been very long and tiring, the last few days "so very busy." All he wanted to do was sleep. It doesn't sound much like motor sports, more like autogenous training.
Vettel has been chased through an obstacle course without pit stops, constantly showered with congratulations and the same questions, pushing him to the very limits. Now all he wants is to go home. "To take my time," he says. "With friends and family. Without cars or racing." And without sponsors telling him what to do, and when.
KLAUS BRINKBÄUMER, LUKAS EBERLE, DETLEF HACKE, ALEXANDER SMOLTZCYK, ALFRED WEINZIERL
